Dollarama Reports First Quarter Results for Fiscal 2026
Dollarama Inc., a leader in Canada's discount retail sector, has released its financial results for the first quarter of fiscal 2026 ending on May 4, 2025. The data reveals a robust sales increase of 8.2%, totaling
$1,521.2 million, a significant rise from
$1,405.8 million during the same period last year. This growth comes amidst an ongoing commitment to expansion both in Canada and within the Latin American markets.
Key Financial Highlights
- - Comparable Store Sales: These grew by 4.9%, building upon a 5.6% increase observed in the corresponding quarter of the previous fiscal year. Notably, there was an increase in transaction volume by 3.7% along with a 1.2% rise in the average transaction size.
- - Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged by 18.8%, reaching $496.2 million and yielding an EBITDA margin of 32.6%, up from 29.7%.
- - Operating Income increased to $388.8 million, marking a 20.7% elevation compared to the prior year, with an operating margin of 25.6%.
- - Net Earnings climbed by 26.9% reaching $273.8 million, which translates to a 27.3% rise in diluted net earnings per share to $0.98.
This solid performance reflects Dollarama's focus on providing value through its extensive range of consumable and seasonal merchandise at unbeatable prices.
Expansion and Growth Strategy
Dollarama’s growth can be attributed to its strategic expansion, as evidenced by the opening of
22 net new stores in the first quarter. This adds to the existing store network, which now comprises
1,638 locations across Canada, up from
1,569 a year ago. The company’s commitment to expanding into Latin America, particularly through Dollarcity, continues to gain traction with ongoing efforts to deliver value in this emerging market.
Neil Rossy, President and CEO of Dollarama, expressed optimism about the company's trajectory, noting the strong start to fiscal 2026 driven by sustained demand for consumables and effective seasonal offerings. He highlighted Dollarama's confidence in its upcoming acquisition of The Reject Shop, Australia’s largest discount retailer, anticipated to finalize by the end of July 2025.
Operational Insights
The first quarter results also reflect an enhancement in gross margins, which were noted at
44.2%, a rise from
43.2% last year. This increase is attributed to decreased logistics costs. Dollarama's focus on operational efficiency remains a cornerstone of its strategy, as evidenced by a slight reduction in selling, general and administrative expenses (SGA) as a percentage of sales.
The company holds a significant stake in Dollarcity, which operates as a value retailer in Latin America, currently boasting
644 stores spread across Colombia, Guatemala, El Salvador, and Peru. In this quarter, Dollarcity contributed
$40.3 million in net earnings, a striking increase of
82.4% from the previous year.
Looking Ahead
As Dollarama sets its sights on the remainder of the fiscal year, the company has reiterated its guidance for fiscal 2026. The aim includes opening
70 to 80 new stores while maintaining comparable store sales growth between
3.0% and 4.0%.
The outlook remains cautiously optimistic, with plans to leverage existing strengths to adapt to market changes and customer preferences. With these developments, Dollarama is poised not just to thrive in the immediate term but also to create lasting growth in the retail landscape.
Conclusion: Dollarama's first quarter results for fiscal 2026 demonstrate a clear trajectory of growth and resilience. By focusing on strategic expansion, maintaining operational efficiency, and delivering value, Dollarama is well-positioned to navigate the evolving retail environment successfully.